Chinese manufacturer and Apple partner Foxconn plans to expand the size of its iPhone-producing Zhengzhou plant, with the $1.1 billion construction expected to make it the largest smartphone-producing facility in the world.

Chinese language newspaper China Daily reported on Monday that Apple's Chinese manufacturing partner plans to double the size of its smartphone plant at Foxconn Science Park in Zhengzhou, which currently produces over 200,000 iPhones a day.

Foxconn's plans call for a $1.1 billion addition to the facility located in Central China's Henan province, with boosted revenue from the massive expansion expected to bring in $20 billion in sales revenue in 2012.

Apple's primary iPhone manufacturer will increase the number of production lines to 95 and add to its over 1 million mainland China employees, 130,000 of whom work at the Zhengzhou facility. Foxconn currently employs a total of 1.2 million people and supplies electronics to a number of worldwide companies.

The Taiwan-based company also operates a production facility in Brazil which also produces certain iPhone models, and is currently trying to iron out local legal issues so that it can fulfill a $12 billion investment to build an iPad manufacturing plant in the region.

Recent rumors suggest that Foxconn will begin producing the next-gen iPad 3 in January, which is expected to include a display with a similar pixel density to iPhone 4 and 4S Retina Displays.

Wonderful; that should cut ship times by quite a bit, even in the heavy seasons.

Also, in before this moves from talk about how much better this will be for iPhone availability to talk about how much worse the workers will be treated and how this is somehow directly and exclusively Apple's responsibility.

Nice to see my money is such a strong stimulant for Chinese job creation.

If I could find another company to satisfy my tech lust that actually made their products in America, I wouldn't hesitate to abandon Apple for their goods. Unfortunately they're all in on it. Even Samsung, who I thought made their stuff in Korea, has relocated large portions (if not most) of its manufacturing to China.

Nice to see my money is such a strong stimulant for Chinese job creation.

If I could find another company to satisfy my tech lust that actually made their products in America, I wouldn't hesitate to abandon Apple for their goods. Unfortunately they're all in on it. Even Samsung, who I thought made their stuff in Korea, has relocated large portions (if not most) of its manufacturing to China.

You can't win.

Word of advice: Breathe.

With the most recent note that Chinese manufacturing profits are at 2% only made up by massive volumes it's rather clear that even that centralized Far East model will soon be failling.

The only solution will become one that Foxconn itself is realizing: Regional manufacturing.

In short, with advanced materials [GlobalFoundries, IBM, TSMC and yes Samsung] have this quarter began it's $4.4 Billion upstate NY expansion and the new Fab going on-line already it's rather clear that regional fabs will become a reality.

This will provide Apple and others a means to develop Global Fab Contracts and allow a shorter-to-market turn around and thus justify having regional fabs.

With advanced materials research in the US this country is poised to be prime for heavy investment.

Current electronics with rare earth metals concentrated locally in China will begin to lose it's allure as alternative materials far more common and abundant across the globe allow the holders of key research [like the US] to regain a big footing. Still, you want to spread those suppliers regionally. A lot of the product price tag is wasted in distribution and development between suppliers and engineering firms designing the product.

Cutting down time to market will be where firms can satisfy share holders while providing more jobs globally.

Fuel costs make shipping products 10,000 miles away not nearly as attractive as it once was when costs were 1/10th they are today. Fuel isn't going to ever return to a low cost until alternative energy sources become cheaply accessible and that is where another battle for greed will create another recession or two.

Nice to see my money is such a strong stimulant for Chinese job creation.

If I could find another company to satisfy my tech lust that actually made their products in America, I wouldn't hesitate to abandon Apple for their goods. Unfortunately they're all in on it. Even Samsung, who I thought made their stuff in Korea, has relocated large portions (if not most) of its manufacturing to China.

You can't win.

The A5 processors in the iPhone 4s and iPad 2 are produced in Texas. Also, did you see the article reposted on almost every tech site last week about how little added value the Chinese production of Apple devices ends up being? Bringing those jobs to America wouldn't contribute very much and you'd probably have about as hard a time finding people who wanted to work in those factories for minimum wage as farmers in southern and western US do finding migrant harvesters to bring in the crops.

Nice to see my money is such a strong stimulant for Chinese job creation.

If I could find another company to satisfy my tech lust that actually made their products in America, I wouldn't hesitate to abandon Apple for their goods. Unfortunately they're all in on it. Even Samsung, who I thought made their stuff in Korea, has relocated large portions (if not most) of its manufacturing to China.

Fuel costs make shipping products 10,000 miles away not nearly as attractive as it once was when costs were 1/10th they are today. Fuel isn't going to ever return to a low cost until alternative energy sources become cheaply accessible and that is where another battle for greed will create another recession or two.

Fuel prices are up. They're not up 10x. And they're not enough to move the needle on production decisions.

Fuel costs make shipping products 10,000 miles away not nearly as attractive as it once was when costs were 1/10th they are today. Fuel isn't going to ever return to a low cost until alternative energy sources become cheaply accessible and that is where another battle for greed will create another recession or two.

True... fuel is expensive.

However... if Apple is selling 200,000 iPhones a day... they are probably producing close to 200,000 iPhones a day as well.

The money they save by having Foxconn manufacturer all those iPhones... rather than a more expensive factory geographically closer... is probably pretty substantial.

Besides... if Apple can ship 5,000,000 iPhones at once on a boat across the ocean... they're probably not feeling the fuel crunch at all. The shipping cost per unit is minuscule at that scale.

However... if Apple is selling 200,000 iPhones a day... they are probably producing close to 200,000 iPhones a day as well.

The money they save by having Foxconn manufacturer all those iPhones... rather than a more expensive factory geographically closer... is probably pretty substantial.

Besides... if Apple can ship 5,000,000 iPhones at once on a boat across the ocean... they're probably not feeling the fuel crunch at all. The shipping cost per unit is minuscule at that scale.

It might as well be zero. Even if they ship them by air (which is more likely) the fuel cost is essentially zero. Imagine how many iPhones can sit in that coach seat? Maybe 50? Then consider the fact that on a fedex flight, there are no overhead bins or aisles or free drinks. Anyone who thinks that fuel costs are a factor in Apple's production plans is just clueless.

It still amazes me how people think that in the USA there would be hundreds of thousands of people that would be crashing in the doors looking for employment....and....willing to produce the same amount of product in the same time frame for the same unit cost as workers in China. As much as I love this country and as much as it pains me to say this....the American workforce is lazy and think they're entitled. I know, I'm an employer and I see it everyday.

Fuel costs make shipping products 10,000 miles away not nearly as attractive as it once was when costs were 1/10th they are today. Fuel isn't going to ever return to a low cost until alternative energy sources become cheaply accessible and that is where another battle for greed will create another recession or two.

Sorry, but most of the components are being manufactured in Southeast Asia as well as well as overpack materials like AC adaptors, packaging, printed materials, etc. Sure, Foxconn could build factories in Texas, New York, or Ireland, but it still needs to move the parts from the suppliers to the final assembly line. A lot of the stuff goes by train and/or truck in Asia.

There's a certain amount of accessibility to rare earth materials that can be natively found in reasonably large quantities in China. Also, warehousing expenses are dirt cheap in China.

It's not just about fuel prices for delivery of finished goods.

The main reason for Foxconn to create regional manufacturing centers is to spread risk, not to save fuel costs. What the Thailand floods did to the global hard drive market is an example of what happens when an industry is in one region.

I wish the jobs were in America to but come on people, those workers are paid crap wages( probably 75 cents an hour) and work under such dangerous conditions they would make OSHA scream.
During one of those GOP candidate debates a moderator ask that lot of looney tunes what they would do to stop a growing a China. LOL! China is America's sugar daddy.

So ... doubling the size of a plant that currently produces 200,000 iPhones a day. Does that imply 400,000 iPhones a day or a mix of product with something else? And where in the world will those products - whatever they are - be absorbed? My guess is that this move is less geared toward the developed markets in North America and Europe and more directed to China, India and other markets where Apple considers their development and growth potential is very high.

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

There was a study that with all of the jobs in China, the Chinese only gest about 2 percent of the profit, while 30 to 40 % goes to Apple. There is no money in raw manufacturing.

Correct. The margins are razor thin on consumer electronics manufacturing.

That's one reason why Tim Cook is CEO of Apple today. When Steve Jobs hired Cookin the late Nineties, the latter pushed to get Apple out of manufacturing. It's a cut throat, low margin business requiring enormous capital with scant opportunity to increase shareholder value.

So ... doubling the size of a plant that currently produces 200,000 iPhones a day. Does that imply 400,000 iPhones a day or a mix of product with something else? And where in the world will those products - whatever they are - be absorbed? My guess is that this move is less geared toward the developed markets in North America and Europe and more directed to China, India and other markets where Apple considers their development and growth potential is very high.

My guess is that this means that another factory can be reconfigured to build something else (e.g., iPads or maybe Kindle Fire).

There is no indication here that Foxconn has specifically locked product manufacturing to every manufacturing line they own.

So ... doubling the size of a plant that currently produces 200,000 iPhones a day. Does that imply 400,000 iPhones a day or a mix of product with something else? And where in the world will those products - whatever they are - be absorbed? My guess is that this move is less geared toward the developed markets in North America and Europe and more directed to China, India and other markets where Apple considers their development and growth potential is very high.

Apple... and more importantly Tim Cook... are masters of the supply chain.

Apple products are still is huge demand at the moment. And it never seems to slow down.

I'm pretty sure this is all part of Apple's plan to stay competitive and provide timely deliveries all across the world.

I went to my Verizon store to buy a 16GB black iPhone 4S. (a very common model) Apparently... my Verizon store doesn't keep any iPhones in stock. I don't know if it's because of a shortage or just general policy.

Long story short... I ordered my iPhone on December 19th... but it didn't even ship until the 23rd.

Nice to see my money is such a strong stimulant for Chinese job creation.

If I could find another company to satisfy my tech lust that actually made their products in America, I wouldn't hesitate to abandon Apple for their goods. Unfortunately they're all in on it. Even Samsung, who I thought made their stuff in Korea, has relocated large portions (if not most) of its manufacturing to China.

You can't win.

Even Samsung? Why would making stuff in Korea make you happier than making stuff in China?

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

With the most recent note that Chinese manufacturing profits are at 2% only made up by massive volumes it's rather clear that even that centralized Far East model will soon be failling.

The only solution will become one that Foxconn itself is realizing: Regional manufacturing.

In short, with advanced materials [GlobalFoundries, IBM, TSMC and yes Samsung] have this quarter began it's $4.4 Billion upstate NY expansion and the new Fab going on-line already it's rather clear that regional fabs will become a reality.

This will provide Apple and others a means to develop Global Fab Contracts and allow a shorter-to-market turn around and thus justify having regional fabs.

With advanced materials research in the US this country is poised to be prime for heavy investment.

Current electronics with rare earth metals concentrated locally in China will begin to lose it's allure as alternative materials far more common and abundant across the globe allow the holders of key research [like the US] to regain a big footing. Still, you want to spread those suppliers regionally. A lot of the product price tag is wasted in distribution and development between suppliers and engineering firms designing the product.

Cutting down time to market will be where firms can satisfy share holders while providing more jobs globally.

Fuel costs make shipping products 10,000 miles away not nearly as attractive as it once was when costs were 1/10th they are today. Fuel isn't going to ever return to a low cost until alternative energy sources become cheaply accessible and that is where another battle for greed will create another recession or two.

Total nonsense. You show a lack of understanding of real economics and IP issues. Companies are not about to put their most important technology / iP into Chinese based FABs/foundries. They never have and aren't about to now so your example is mute. Further, shipping costs are not that significant when you look at the density that Apple's products are shipped in. The greater expense is the ground shipping in the US, not the air shipments in mass quantities that Apple uses for the most part. They are also shipping in such great volumes, and such great logistical efficiencies (pre-loaded and labeled containers) that it makes their shipping costs significantly lower in comparison to you or I shipping something the same route.

Lastly, what time to market are you speaking of? Apple's supply chain is so magnificently efficient that my made-to-order MacBook Pro which I ordered on a Monday afternoon was built in China and delivered to me Thursday morning the same week.